Tony Blair’s final European Union summit, assuming that he does not return as its first permanent president, ended predictably enough. The deal on an unnecessary new treaty in the early hours of yesterday morning allowed all 27 leaders to claim victory. Even the Poles, cast in Britain’s traditional role of saying no to Europe, finally accepted a murky compromise on voting rights, saying they had done so for reasons of “solidarity”. Mr Blair left Brussels for his audience with the Pope boasting that none of his “red lines” had been breached and that Britain had once more been resolute in the face of European pressure.

However, Gordon Brown’s first incursion into EU deal making, by telephone from his office in the Treasury, had been to stiffen the prime minister’s resolve. Mr Blair had been prepared to nod through a move by Nicolas Sarkozy, the new French president, to remove the phrase “free and undistorted competition” from the preamble to the new treaty. He succeeded in doing so but only by accepting, at Mr Brown’s urging, a separate legally binding protocol restating the commitment to competition and a level playing field within Europe.

It is a fudge and it may be one that leaves Mr Sarkozy with the last laugh. As the CBI put it yesterday: “We remain concerned that the removal of this reference from the EU’s objectives strengthens the hand of protectionist elements within Europe.”

That is not the only problem with the deal. Mr Blair’s tactic – set out your red lines in advance and claim victory if they remain intact – is a smokescreen. He secured what was claimed to be a clear opt-out from the charter of fundamental rights. If so, that would prevent Europe driving a coach and horses through our flexible labour laws. But lawyers are rubbing their hands at the prospect of challenging the opt-out and the power-hungry European courts are looking forward to reinforcing their primacy over UK law.

Most of the red lines were not under the remotest of threats, and Mr Blair knew it, and in other areas the prime minister conceded an erosion of national sovereignty. “There are some power transfers,” Margaret Beckett, the foreign secretary, finally admitted yesterday.

That is putting it mildly. Most of what was agreed in Brussels was in the original constitution rejected two years ago by Dutch and French voters before it could get to a referendum in Britain. There will be an EU president, majority voting in foreign policy, an EU diplomatic service and a foreign minister – the “high representative of the union for foreign affairs and security policy” straight out of Gilbert and Sullivan.

Britain’s right of veto will disappear in a whole series of policy areas, including transport, energy, space, science, sport and the annual budget. The European parliament’s powers will be beefed up, including its ability to veto. The European Court of Justice will get enhanced powers over justice and immigration. There is a commitment to a “progressive framing of a common defence policy”. As Open Europe, the think tank, put it: “When you look at the detail of what has been agreed, it is clear that this is just the old EU constitution in everything but name.”

This is the way that power slips away from national governments and national parliaments to Brussels: not with a bang but a whimper – the drip-drip loss of sovereignty in small-print measures agreed by tired leaders in the middle of the night. Mr Blair’s defence, that this is no more of a loss of power than that conceded by the Conservatives, was about as lame as it gets.

If Mr Brown really wanted to show his European mettle he would put yesterday’s treaty to a referendum, in line with Labour’s manifesto commitment to do so. He should abandon Mr Blair’s treaty, but we suspect he will not. Britain will have handed over another set of powers to Europe, signing up to a constitution in all but name, without the voters having any say in it.